Sunday, November 26, 2006

Toy Scalping and Fake Bidding for PS3s on Ebay

There is a lot of bogus bidding on PS3s on Ebay, and the $20,000 sale I mentioned in the post below did not go through. Many of the winning bids for PS3s above $5,000 were from bidders who were "Not registered users" or suspicious "New users" with 0 feedback. For example, this Ebay auction ended with a winning bid of $5,000 from a user named "bigdaddy1923223231," who is: a) not a registered Ebay user, b) has only been a member since Nov. 19, 2006, and c) has 4 negative feedbacks, all for making fake bids on 4 PS3s on the same day! Here is another example of a fake bidder, Plasticadhesive, who made the fake bid for $20,000 mentioned in my posting below.

There appear to be hundreds of fake bids on PS3s, what's up with that? Is it intentionally malicious behavior like spreading a computer virus or what? How do we explain intentionally bogus bidding on PS3s? Comments welcome!

According to a Washington Post article, 14,675 PS3s have been sold on eBay for an average price of $1,186 from November 17 to November 24. So the pricing puzzle remains: Why does Sony set the retail price of PS3s at $600 when the real market price is about twice that, $1200 (according to Ebay sales)? Why sacrifice $600 in profits to "toy scalpers" on Ebay? We assume Sony is not trying to avoid making profits, so what is the deal? Cheap publicity? CSR? Goodwill? Developing customer loyalty? What is going on?

We assume profit-maxizing sellers charge "whatever the market will bear," so why doesn't Sony? (I can guarantee that if you sold you house, you would charge "whatever the local real estate market will bear" and you wouldn't sell it for $600,000 if the market value was actually $1.2 million!) Comments welcome.

1 Comments:

I think that Sony actually knonws that they could sell certain amount of PSP3s at $1200 dollars but the demand will be limited. There will only be selling so many $1200 systems. Instead Sony priced the PSP3 to be appropiate for a larger market... sure they are sacrificing X % of profits, but they are ensuring larger profits from tapping in to a larger segment - the people that are willing to pay 600.